Invalid reassessment notice under section 148 leads to appeal success for Assessee

The Tribunal allowed the Assessee's appeal, setting aside the reassessment proceedings due to the invalidity of the notice under section 148, issued without proper approval. Other issues raised by the Assessee were deemed academic. The appeal was decided on 12.06.2023.

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Issues Involved:
1. Validity of notice under section 148 without proper approval.
2. Jurisdiction of the Assessing Officer (AO) under section 147.
3. Non-compliance with the law of natural justice in reassessment proceedings.
4. Validity of reassessment based on reasons recorded or show cause notice.

Summary:

Issue 1: Validity of notice under section 148 without proper approval:
The Assessee contended that the notice under section 148 was invalid as it was issued before obtaining approval from the Principal Commissioner of Income Tax (Pr. CIT). The notice was dated 28/03/2018, while the approval was dated 29/03/2018. The Revenue argued that the approval was granted online on 28/03/2018, and the notice was issued on the same date. The Tribunal found a discrepancy between the online and physical approval dates. The physical approval was dated 29/03/2018, which was after the notice issuance date. This was deemed a jurisdictional defect under section 151, rendering the notice void ab initio and the assessment proceedings invalid.

Issue 2: Jurisdiction of the Assessing Officer (AO) under section 147:
The Assessee argued that the notice under section 148 was issued by ITO W-6(5) Ludhiana, but the assessment was completed by ITO W-4(3) Ludhiana, which is not permissible. The Revenue countered that the notice and assessment were both handled by ITO W-4(3) Ludhiana. The Tribunal found no merit in the Assessee's argument as the correct jurisdictional authority was not disputed during the assessment proceedings.

Issue 3: Non-compliance with the law of natural justice in reassessment proceedings:
The Assessee claimed that reassessment was conducted without providing the statement of a third party or allowing cross-examination, violating natural justice. The Revenue argued that the reopening was based on a report from the Investigation Wing and that the Assessee was aware of the transaction details. The Tribunal did not delve into this issue in detail as the primary ground of invalid notice was sufficient to decide the appeal.

Issue 4: Validity of reassessment based on reasons recorded or show cause notice:
The Assessee argued that the reassessment was invalid as it was not based on the reasons recorded or the show cause notice. The Tribunal did not address this issue separately, as the invalidity of the notice under section 148 was sufficient to set aside the entire reassessment proceedings.

Conclusion:
The Tribunal allowed the Assessee's appeal, setting aside the reassessment proceedings due to the invalidity of the notice under section 148, which was issued without proper approval. Other contentions raised by the Assessee were dismissed as academic and infructuous. The appeal was pronounced in the open court on 12.06.2023.

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